2018 and 2022 saw superior performance from female-managed equity portfolios
Female portfolio managers have shown themselves to be superior asset protectors to their male counterparts throughout this year's market slump.
According to a report by Investment Metrics, a Confluence firm, large-cap equities portfolios that are at least partially managed by women lost a median of 2.6 percent from January to September. Similar portfolios managed by all-male teams had a median loss of 5.9%.
Only 13 out of the 90 large-cap portfolios studied were either managed or co-managed by a woman. The MSCI All-County World index lost 8.9% during the market downturn of 2018, while women performed better than men throughout that period.
“At least in the near term, it would seem that women-led teams do a better job at protecting assets in down markets,” Scott Treacy, author of the report, wrote.
Read more: Why firms must give women portfolio managers an opportunity
Before 2012, Treacy didn't see a major change in performance. “However, in the recent five-year period, women have outperformed men in global equity at a median level,” he said in an interview with Institutional Investor.
Top female portfolio managers over the past ten years were highlighted in the IM study, including Elisa Mazen of Clearbridge, Cassandra Hardman of Hardman Johnston, Caroline Cai of Pzena, and Sarah Ketterer of Causeway.
According to the analysis, growth-style investors Mazen and Hardman have, respectively, exceeded their benchmarks 80% and 73% of the time since 2012.
Women are underrepresented among influential decision-makers in the investment industry, despite their superior performance.
According to Investment Metrics, women only manage US$90 billion of the US$698 billion in total strategy assets in the global large-cap category.
Only 7% of asset managers had hired women as chief executive officers, according to a 2021 survey by Treacy and his colleagues.
Read more: Fund management will reach gender parity but not for 127 years
Private markets also exhibit a lack of gender diversity.
Even while more gender-diverse PE managers attract twice as much capital from allocators compared to all-male teams, a McKinsey analysis found that women only make up 23% of investment roles at international private equity firms.
“Our analysis shows there is a strong case to build female-led teams,” Treacy wrote in the IM report. “More women should be given more opportunities to lead portfolio management teams at asset management firms and more institutional investors should be directing assets towards women-led portfolios.”